Monday, August 11, 2008

I watched the opening ceremony to the Olympics over the weekend, and I have been favorably impressed.

I have actually been quite interested in events in China for a while now, and have followed their progress over the last few years more closely than that of any country other than the United States.

There is a reason for this.

Assume that China’s economy continues to grow to the point that its per-capita wealth (its standard of living – according to one measure) is equal to that of the United States. Currently, China has between 4 and 5 times the population of the United States. This means that China would then have 4 or 5 times the economic power of the United States.

What would it be like to live in a country that, on the world stage, would be a bit player – a country that had so little economic power that it could be conveniently ignored?

If China were to become that powerful, then it would effectively control the world economy. Businesses would learn to focus their attention on satisfying the Chinsese cutomers – because that is where the money is. Americans would have to buy whatever the Chinese bought – because the Chinese would determine what is available to sell.

There are a couple of areas in which we can see this type of dynamic at work. One of which is in the manufacture of text books for public schools.

California and Texas have a policy of purchasing a common textbook across the whole state. The size of their purchase gives them economic power, which gives them the ability to dictate terms to potential suppliers. If they do not like the deal that a particular customer is offering, then they take their business elsewhere. It makes good economic sense for the state of Texas to do this. They can negotiate a far better price for text books than they could as several small and independent districts.

In Texas, some factions have realized that this economic power also comes with a power to indoctrinate. They want to dictate what children are taught in the public schools – particularly in the field of biology (creationism), but also in other classes such as history, civics, and social science. They aim to win seats in government where they judge books, in part, on whether they have the ‘right content’.

The result is that these factions ultimately end up having the power to determine what text books are available across the whole country. Manufacturers who are aiming to capture the Texas market write their text book so as to win favor in the face of their political and economic biases. When the people of Massachusetts and Oregon go to buy textbooks, they find that the books available have been written to meet the Texas standards.

Currently, in the world economy, America plays the role of Texas. However, if things continue going the way they have been, we can expect a day when China plays the role of Texas in the world economy, and the United States plays the role of New York or Pennsylvania . . . powerful, but not dominant.

Another area where we see this effect is in retail and manufacturing. Manufacturers today know that if they want to sell product, they need to get that product onto the shelves at Wal-Mart. In many cases, if Wal-Mart shuts them out, then they have an option of either accepting their small stature as a local company, or go out of business entirely.

Wal-Mart knows this, too. So, Wal-Mart goes to potential suppliers and dictates what the company must do in order to get their product on Wal-Mart shelves. Everything that a manufacturer does – from the size and shape of the package to how it handles employee relationships – is dictated by Wal-Mart, to the degree that Wal-Mart chooses to do so.

When Wal-Mart talks about how it is rolling back prices, sometimes what they are talking about is their success at getting some manufacturer to lay-off or cut benefits to employees so that they can supply the same product to Wal-Mart at a lower price.

Every other company that the manufacturer sells to, then, has no option but to purchase the product that has been designed to meet the Wal-Mart standards. Once the manufacturer has tooled its manufacturing center to meet Wal-Mart’s standards, there is often little reason to build a second system that meets different standards.

So, we can expect that as the Chinese economy grows – assuming that its society does not implode, that we might find ourselves where the world economy is geared to meet Chinese tastes. Even our own businesses, in such a world, would be geared to please the Chinese market, because American businesses will recognize that there is far more money to be had manufacturing things for sale in China, then there would be in manufacturing things for sale in the United States.

Is this frightening?

It should not be. For decades now, the world has lived in the shadow of the United States. If it is so horrible to live in a world where one is not in the country that is at the center of the economic universe, then 96 percent of the people are living a horrible existence – including people in countries like Belgium and New Zealand – countries whose economies are far too weak to dictate anything on the universal economic stage.

Ultimately, we might find ourselves in a world where the United States controls about 4% of the world economy, uses 4% of the world’s energy, and has 4% of the world’s military power under its control. All of this corresponding to the fact that we have 4% of the world’s population.

If (when) that day comes, how would we want the economic (and military) powerhouses of the world to treat us? What rules and principles are we going to want them to adopt towards smaller and economically and militarily weaker countries?

Whatever the answer to that question is, that is how we should start treating other countries today. Those are the standards that we should adopt now so that, if (when) we are no longer the most economically and militarily powerful country on the planet, we are living with economic and military powerhouses that have internalized the principles that we have helped to teach.

This is, in fact, the most frightening prospect. It is that other countries will pass us in economic and political power, and use that power in pretty much the same way we have used it – particularly in the last 8 years.

It may be wise for America to pay attention to setting a standard for how larger overall economies treat smaller overall economies. It will not be that America is impoverished, with lower standards of living than China. It is only that China, even with half of the standard of living as the United States, will still have over twice the overall economic (and military) power as America.

19 comments:

Unfortunately it is an all too common experience for me that US Americans are so lost in their pride and power that they cannot conceive ever not being the world superpower. Indeed, I oftenly see example of outright denial of world situations.

It is this pride that makes me scared. It makes me scared that an insane US president (and your country has already displayed a willingness to put them into power if they say the right things or line the correct pockets) will prefer to start a nuclear war than allow someone else to take over.

Honestly, I do not see the US Americans ever accepting that their empire is on the rapid decline. The rest of the world knows it but not the majority of your own countrymen.

db0: I notice that you use "US American". I have been using it for years. A part of the arrogance and ignorance of US Americans is that they need to believe that the term "American" only applies to them. They fail to recognize that to the rest of the world, Canada, Mexico and ,yes, even CUBA, are American. They are now bemoaning the "outsourcing" and "loss of jobs" as US American corporations take advantage of the cheaper labour their US American owned foreign "corporations" or "interests" employ. The loyalty of these US American interests is not to US America, but to the economic interests of their shareholders. There will come a day when US America won't be able to celebrate Christmas "like they did in the old days" because their Chinese and Indian Governments will demand COD for the Greeting Cards, Decorations and Gifts manufactured in their countries.

Do US Americans comprehend just how much they owe China? Would Wal*Mart even exist if it wasn't able to exploit foreign labour?

US America may be Number One in the world for a lot of things but it should be reminded that it also has the Largest World Debt and it is not paying its bill!

At the same time, we US Americans have acted from time to time in ways we can be proud of.

For all of our spending on military programs and nuclear weapons, instead of the social programs or foreign welfare that many would have had us spend our money on, we've been relatively judicious in the use of our weapons. The incumbent Administration is an unfortunate exception to that rule, and so was the Johnson Administration from 1963-1968. But the general rule since 1945 has been for the USA to deter rather than to attack. There is some bellicose rhetoric being exchange now about Georgia and about Iran, but the likelihood that the USA will actually use its military power in those areas is quite small.

We used our economic power to subsidize the reconstruction and modernization of every nation we've had bad military relations with -- including Iraq, Germany, and Japan, as well as underwriting the reconstruction of all of Europe after WW II.

We lent our military to Europe in the face of a (lest we forget) truly terrifying and overwhelming Soviet military with every apparent intention of conquering all the way to the Atlantic. Because we spent our treasure protecting Europe, European nations did not have to and were able to build economically viable nations with very substantial social welfare institutions.

We led the way to create the United Nations, which has proven to be a useful if somewhat ineffectual forum for international diplomacy.

We spend more per capita on foreign aid than any other nation on the planet. We feed more people in other nations than anyone else. There is not a country on earth that has not received a generous offer of assistance from us after a disaster -- including the former Soviet Union, Iran, and Burma.

We could have done a lot worse for ourselves than we have. If you're considering what sort of a nation the USA is ethically, try to keep your frustration with the current President in perspective. He's been the exception rather than the rule, and he'll be out of power on January 20, 2009.

Transplanted Lawyer: US American foreign aid comes with the provision that the funds must be spent in US America, often at highly inflated prices. All nations do this. US America perfected it.

US American may have created the United Nations but does not recognize its laws. It is possible that US America believed it could control the UN, and couldn't. Can anybody recall that for a long period in the UN's history it was bankrupt because, US America went several years without paying its dues. The rest of the world saw the US American failure to pay their bill as their complaint that they weren't "getting their own way".

And, how many US Americans have any idea of what price the UK paid to them to join in the Second WW? Paying for protection and aid is valid, but what took place is seen by the more enlightened people of the world as extortion, cohersion and exploitation.

With regard to "keeping our frustratation with the current president in perspective" we would like to remind you that US Americans elected him . . . and for a second time, no less. And, what about some of former presidents who made the rest of the world suffer through their "reigns"?

US Americas have accomlished a lot. Individually they are some of our worlds great innovatoors and philanthropists. With regard to their "benevolance", however, we would doubt that the generosity would be as great if it wasn't "tax deductible".

Unfortunately, "evil triumphs when good men stay silent". Maybe the good men are speaking out but cannot be heard because they are drowned out by other less informed US American's shouting "We're Number One!"

P.S. And don't forget, "Atheists are not considered good US Americans!" If one of your presidents had his way, Atheists would be denied citizenship!

We used our economic power to subsidize the reconstruction and modernization of every nation we've had bad military relations with -- including Iraq, Germany, and Japan, as well as underwriting the reconstruction of all of Europe after WW II.

Yes, if hisotry serves me correctly, you destroy a country, rebuild it, and charge heavily. I believe Germany is still repaying US America for its WW11 activies. We haven't seen the US use its power and might help end major disputes that did not have a "profit factor" actached. Have you heard of any US troups helping out in Africa? It would appear that the only "international despots" US America recognizes are those that have "oil wells" in their back pockets. US America involvement in any International squable has had to pass the "means" test. There has to be a substantial profit for US America to get involved. Of course, the spin doctors would have us believe that US America is spreading democracy and freeing the world of opporession.

There's enough baseless assertion in this thread to require 1,000 words to refute, so I'll just lay out a simple challenge for the group: name one nation that has done more than the USA in the last century to relieve suffering and improve life on Earth.

Squid: If only life was so simple! Have you read anything by Chomsky? Until you have studied Chomsky (I chose him because I believe he represents US America's conscience) you shouldn't repeat the spin doctoring that appears to have worked on you.

Anton, I could point out ways in which Canada, too, has failed to live up to its own ideals or elected (and re-elected) some people who have said and done some kooky things. But I won't. Rather than throw stones, I'll just hope that when you look south of your border, you too try to take in the whole picture before passing judgment rather than selectively looking for things to criticize. Cheers.

Transplanted Lawyer: I heartily agree with you that Canada shouldn't brag about its accomplishments either. If you will notice, Canada isn't busy telling the world that it is Number One. I won't take it personally if you do throw some stones our way, we most likely deserve them.

When you assess some of the things that have been done by Canda, you might see who was in power. When you have a Republican president and we have a Conservative prime minister, all kinds of terrible things happen.

Attempting to "change" things in Canada usually results in finding that the "root" of a problem resides south of us. And since US American interests own outright more than 65% of Canada, we do what we are told.

As an Atheist, I am personally concerned since Christian extremism is growing in Canada. Where it was not an issue to be an Atheist thiry years ago, it is getting to be one now. Don't let the census fool you, while we have a very high who claim their Atheism on a census form, our percentage of Atheists who have "come out" is very, very low! As you fight for Atheist rights, it might advisable not to let your loyalty, traditions and memes get in the way of common sense. The world recognizes that the Number One intellectual in the world is Noam Chomsky. Speaking for world interests, we wish more US Americans would listen to Noam.

squib: I think it would be important to add this example: The FBI funded the testing of LSD on unsuspecting Canadians through their influence at McGill University in Montreal. The victims had to fight for many years, in many courts, for compensation for the horrible after effects. More volatile halucigens were used in experiments on some citizens of rural Alberta. The future father-in-law of Brian Mulroney, a Canadian prime minister, was one of two doctors who conducted the "experiments" at McGill. It is widely known now that this was one of the CIA's covert acts.

Thank you for the examples, Anton. I'm still not sure I believe that the USA is the source of Canada's problems, but we certainly have thrown our weight around the continent.

Back to the original topic: as much as I'd like to believe that the Golden Rule applies at the geopolitical level, it just seems hopelessly naive. Nations act in their own interest (or what they perceive to be their interest). If the USA wants to flourish in a world where it doesn't call the shots, it should work damn hard to make itself an indispensable partner with the rising powers. If it's in China's and India's best interest to see the US remain happy and successful, then it's likely to happen. At least, far more likely than if the US just tries to play nice and hope for reciprocation.

Squid: You are welcome! The emerging nations had centuries of abuse from European and US Americans so I can understand their reluctance to trust english speaking "North Americans". Thirty years ago I told my children the best thing they could do was learn to speak Chinese, move to an Asian nation, and become a part of what was going to unfold in the 21st century. I do not regret my advice. I regret that I had to give it! Peace!

As a U.S. American, but most importantly, as a human being, I find it regretful that people attach so much of their identity to their nationality and country. And perhaps Americans are the most beligerent in this regards at this time, perhaps not.

Thus, when Americans (US) hear a criticism of their country, they immediately respond with defensiveness. Although we are not the only ones indoctrinated with nationalism, it is true that we are fed a daily diet of assumed superiority. We are told about all the apparent good things we do in this world, but most of us are unaware of a deeper analysis of why all these things are not neccessarily always so "good".

I am learning Mandarin Chinese (and a little native Taiwanese), and one of my potential plans after graduation is to go to China, Taiwan, or Vietnam to teach English. One of the sad parts of this is that for very few teaching-English jobs in these countries is it required to know the language of your students.

About Me

When I was in high school, I decided that I wanted to leave the world better off than it would have been if I had not existed. This started a quest, through 12 years of college and on to today, to try to discover what a "better" world consists of. I have written a book describing that journey that you can find on my website. In this blog, I will keep track of the issues I have confronted since then.